An Intellectual Property Agreement—The Whats, the Whos, and the Hows
An intellectual property agreement is one of the trickiest legal documents for people to understand.
With many types of intellectual property existing in the first place, protecting this type of property involves intricate rules and regulations.
Whether you are a creator or want to use someone else’s content, this article will help you learn how an intellectual property agreement works.
What Is an Intellectual Property Agreement?
An intellectual property agreement is a legally binding contract between two entities—the owner of intellectual property (IP) and the buyer who wants to use that IP. The owner can also be called the seller or the licensor, while the buyer is sometimes called the licensee. The parties to the agreement can be individuals and companies.
Common types of intellectual property agreement are:
- A royalty agreement—Used when the owners of IP are compensated through regular royalty payments. For example, a musician will give Spotify the right to use their songs for streaming purposes. The musician, in return, receives regular royalty payments in the amount that is agreed upon. The licensor benefits from reaching a wider audience and enjoying a steady revenue. The licensee gets to use the product they would not have the right to otherwise
- A licensing agreement—Chosen when the licensor sells only a portion of his or her IP rights
- An intellectual property (IP) assignment agreement—Entered into when the owner wishes to transfer full IP rights to another person
What Types of Intellectual Property Exist?
If you want to understand intellectual property agreements, you need to familiarize yourself with what the term intellectual property entails and what types of intellectual property exist.
Intellectual property represents the intangible asset of an individual or company. Any original creation that is not physical can be considered IP.
The following table includes the different intellectual properties across industries that use IP agreements:
|Intellectual Property Type||
What It Usually Includes
Who Needs an Intellectual Property Agreement?
Any individual or company that produces intangible assets, wants to sell rights to those assets, or needs to partner with someone to manufacture more products based on the original design needs an intellectual property agreement.
A solid and carefully drawn up IP agreement:
- Ensures that the owner will get compensated
- Prevents the IP infringement
- Determines how any future disputes will be resolved
How To Create an Intellectual Property Agreement?
When it comes to any legal document you need, there are usually three ways to get it:
- Hiring a lawyer to draw up the contract for you
- Downloading a contract template
- Writing the contract on your own
Should You Get a Lawyer?
Hiring a lawyer to write you a contract may seem like the best solution, but unfortunately, it’s not an affordable one.
What Can Go Wrong With Using a Contract Template?
The other option you have is to use a contract template from the internet. This isn’t the optimal choice either since contract templates:
- Include a lot of outdated information
- Are too generic and don’t contain the clauses you need
- Aren’t tailored according to the specific laws of your state or county
- Contain spelling and grammatical errors
What Sections To Include in Your Intellectual Property Agreement if You’re Writing the Contract Yourself
Drafting your own intellectual property agreement may be the optimal solution. Here are the sections you need to include in it:
|Intellectual Property Agreement Sections||
The Information To Include
|Parties to the agreement||
|Duration||The period during which the contract will be in effect|
|Location||The geographical area(s) on which the IP can be used|
|Signatures||Hand-written signatures of the parties and any witnesses to the signing|
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